The ENGINE OF CAPITALISM - GREED Backing Up To Run Over Freedom Again.


Friday, March 23, 2018


I believe the reality of our lives becomes what our youthful egos insist them to be. Consider the friendship between William Mulholland and Frederick Eaton. One man left his name on a lot of Los Angeles real estate. The other is largely forgotten. But 20th century Los Angeles could not have been built without either of them. The problem was they were, both of them, dreaming too big for their own good.
Fred Eaton was a force of nature. Historian William Kahrl described him as “Youthful, aggressive, innovative, (and) startlingly handsome…”. He was also well connected. Fred’s father was one of the founders of Pasadena, California, one of the richest cities in America. After college, in 1875, Fred became superintendent for Los Angeles’ private water company.
In that job Fred hired a muscular Irish immigrant named William Mulholland (above) , as a well digger. “The two of them made an unlikely pair”, wrote DiLeo & Smith in their book "Two Californias", “Eaton was elegant, well born, refined. Mulholland was gruff, a blunt man who loved games and jokes. While Eaton craved public attention, Mulholland shunned it, preferring to spend his evenings reading for his own edification.” With Eaton’s encouragement, Mulholland taught himself engineering and as he advanced in authority he became a close confidant of Eaton’s. But in 1892, when a drought struck the American southwest, Eaton became convinced the city had to find a more dependable supply of drinking water. Mulholland scoffed at Fred's concerns and told his mentor, “If you don’t get the water, you won’t need it.”
Eaton refused to be dissuaded. He traveled north, along the eastern ramparts of the Sierra Mountains. There he found year round snow capped summits producing streams that fed two saline sink lakes in one of the driest places on earth;...
...Mono Lake in the north, and in the south...
closer to Los Angels,  Owens Lake, fed by the gentle and life giving Owens River.
As an engineer Eaton realized that physically it was possible to draw water from the Owens River for Los Angeles by gravity alone because the river had a higher elevation than the city.
Of course, separating the two was two hundred fifty miles of lava fields, desert and mountains, a wilderness that mostly belonged to the Federal Government.  Fred Eaton (above) realized that financially and politically his goal was almost impossible to achieve. Still, he had come to love the terrain and the people of the Owens valley, and after he capped his career in Los Angeles by serving a 2 year term as Mayor in 1898, he retired to spend his summers at a 12,000 acre ranch along the Owens River. And there he might have quietly remained in serene retirement but for two things that changed.
The first was that his friend ,William Mulholland (above) had become the superintendent for the Los Angeles Water Department, now a city agency.  And faced with the same problems Eaton had faced in the same job, Mulholland came to the same conclusion; if it was to survive and grow, Los Angeles had to find more water. And the second thing that changed was the weather.
As 1892 had been a year of drought, 1905 was a year of floods. In the spring heavy rains and heavier than usual snow melts in the Rockies, forced the lower Colorado River to burst through its banks and pour into the depression that became The Salton Sea.
In response to this disaster, and under political pressure to help a number of agricultural development projects around the nation (e.g. “pork”) the Theodore Roosevelt administration created the Reclamation Department (forerunner of the Interior Department). It was America’s first modern experiment with “big government”.  And one of the first projects under consideration by the Reclamation Department was a plan to improve irrigation along the upper Owens River.
The new department sent Fred Eaton to the Mono County Court House (above) to investigate property records. This meant that when Fred started to buy options on water rights to the lower Owens River, the farmers and ranchers assumed he was buying for the irrigation project, and eagerly sold him their rights at bargain basement prices.  
In August of 1905 Fred admitted as much to the Los Angeles Express.  He said, “I knew the government was planning to put in irrigation works… If I had waited until after the government was at work, it would have required $1 million to $2 million more to get the water for the city, and that probably would have killed the project.” 
Back in Los Angeles Fred met with the city attorney. “The result”, he told the Express, “was an agreement that I would turn over to the city all the water rights I had acquired at the price I had paid for them…”.
The cost was a $700,000, for which Fred was fully reimbursed from Los Angeles Department of Water and Power funds. It was a brilliant and glorious gamble for the city and it appeared that Fred Eaton had risked a substantial portion of his wealth out of his love for Los Angeles. And so he had. There was a catch, of course. As Honre' de Balszac wrote, "Behind every great fortune is a crime yet to be discovered."
As William Mulholland began to design the $24.5 million Los Angeles Aqueduct it became obvious that the system would require a reservoir at the head end. Such an artificial lake would provide a dependable flow regardless of drought years or downpours. And Fred Eaton owned just the spot for that reservoir; his ranch above Lone Pine in what was called Long Valley.
In the original paperwork in which Fred had been reimbursed, he also granted permission to build a dam there. But hidden in the details was a height limit on the proposed Long Valley dam of 100 feet. Being an engineer, Fred knew that because of the topography of the site, that was not high enough. And Fred had already decided that a variance which would allow a 106 or 107 foot high dam would cost the city $1 million more.
And once he got into the nitty-gritty details of planning the dam Mulholland realized he had been backed into a corner. The problem was that he realized it at a most inconvenient moment. Just as Fred sprang his trap, the bankers back east, who had financed the aqueduct, sprang theirs.

In late 1910, with the aqueduct construction just past the half way mark, they lowered the cities’ credit rating.  The bankers were hoping that a cash shortage would force the city to sell to them its most valuable asset, the Los Angeles Department of Water and Power. Instead the Board of Public Works which had oversight of the DWP, cut expenses to the bone, eliminating the million dollars for Fred Eaton’s Long Valley dam.
Mulholland (above, right) tried to reason with Fred, but Eaton (above, center)  decided that Mulholland was merely being a tough negotiator and refused to compromise. The friends argued. Heated words were exchanged. And Mulholland walked out of the meeting with Fred, saying angerly and prophetically, “I’ll buy the Long Valley three years after Eaton is dead.”
How could either man have known that petty argument would inspire an open and violent rebellion in the Owens Valley, and kill 1,000 innocent people and cause the greatest man made disaster in California history?
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